29 March 2023
Mr. A provides his own Trucks to Company and MR.A want to pay GST on Forward Charge Mechanism. Mr. A also want to claim whole amount of ITC of Truck. Then at which rate Mr. A shall recover GST from the company ?
10 July 2024
If Mr. A provides his own trucks to a company and opts to pay GST under the Forward Charge Mechanism (FCM), he would need to charge GST at the applicable rate on the supply of services related to the use of the trucks. Here are the key points to consider:
### Applicable GST Rate:
1. **GST Rate for Transport of Goods by Road:** - The GST rate applicable for the supply of transportation of goods by road in a goods carriage is 12%.
2. **Input Tax Credit (ITC) Availability:** - Mr. A, as the supplier, can claim Input Tax Credit (ITC) on the GST paid on goods and services used in providing the transportation service. This includes ITC on the trucks, fuel, maintenance, etc., related to the transportation service.
### Charging GST to the Company:
- Since Mr. A wants to recover the ITC on the trucks and other related expenses, he should charge GST at 12% on the invoice amount for the transportation service provided to the company.
- For example, if the invoice amount for the transportation service provided by Mr. A is Rs. 10,000, he would charge GST at 12%, which amounts to Rs. 1,200 (12% of Rs. 10,000). Therefore, the total invoice amount would be Rs. 11,200 including GST.
### Claiming Input Tax Credit (ITC):
- Mr. A can claim the ITC of Rs. 1,200 paid on the purchase of trucks and other expenses against the GST liability of Rs. 1,200 collected from the company. This ensures that Mr. A effectively recovers the GST he paid on the purchase and maintenance of the trucks.
### Summary:
- **GST Rate to Charge:** 12% - **Calculation:** Invoice Amount × 12% - **ITC Claim:** Mr. A can claim the full amount of GST charged to the company as ITC, provided it is used for the furtherance of his business.
By following these steps, Mr. A ensures compliance with GST regulations while also optimizing the benefit of Input Tax Credit available on his business expenses. It is advisable for Mr. A to maintain proper records of invoices, payments, and ITC claims to support GST compliance and audits.
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